One of the most common questions that I’m asked goes something like this: “If the deflationary long-term cycle is in its ‘hard down’ phase until 2014, why should we expect gold’s value to rise? Shouldn’t we instead expect to see a rising dollar along with a falling gold price?”
That’s a good question and on the surface it makes sense. The dollar after all has historically been inversely correlated with gold, and since the currency tends to benefit from deflation it stands to reason that a rising dollar during “runaway” deflation would lead to lower gold prices. The answer is more complex than this, however...............................................Full Article: Source